Reference: Tech Computer Manufactures Computers in Its Plant Located in Toronto

question 93

Multiple Choice

Reference:
Tech Computer manufactures computers in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:
-Annual subscription fee paid to computer magazine.

• A)Variable period cost.
• B)Fixed period cost.
• C)Fixed product cost.
• D)Variable product cost.

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Definitions:

Trade Acceptance

A written promise or a draft by one party, the seller, to another, the buyer, to pay a specified sum of money at a future date.

Sight Draft

A financial instrument that is payable on demand when presented to the drawee.

Net Present Value

is a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Credit Sale

A transaction where the buyer is allowed to pay for goods or services at a later date, as opposed to paying at the time of sale.